Thu Dec 20, 2012 - 11:38 am EST
Shrink the population, shrink the economy
WASHINGTON, D.C., December 20, 2012, (Acton Institute)—In one of the most memorable mid-1990s episodes of The Simpsons, the curmudgeonly misanthrope Charles Montgomery Burns achieves a lifelong dream: “Since the beginning of time, man has yearned to destroy the sun. I shall do the next best thing: block it out.”
While Mr. Burns had no use for our nearest star, the other residents Springfield were dismayed by the citywide sun-block. They understood, as Steve Martin once said, “A day without sunshine is like, you know, night.”
Only a cartoon villain would propose an idea as absurd as blocking out the sunshine. But in the real world we find its economic equivalent: opposing economic growth.
A prime example is Eugene McCarraher, an associate professor of humanities at Villanova University, who recently wrote in The Hedgehog Review:
The beatific vision of the capitalist moral imagination is the Gross Domestic Product: the yearly growth in the volume of goods and services whose increase is never questioned.
Similarly, the British economic historian Robert Skidelsky says that in his new book he “rejects indefinite economic growth for reasons which are substantially, though by no means exclusively, conservative.”
Too much growth, like too much sunshine, can indeed by be harmful to human flourishing. But why would anyone oppose long-term economic growth?
Consider the consequences if there were to be a long period in the U.S. with no economic growth. The result would be almost as cataclysmic as blocking out the sun:
- Unemployment and poverty would skyrocket.
- The national debt would increase as tax revenues declined.
- Banks and other financial institutions would go bankrupt, leading to housing and credit crises.
- Housing and land prices would sharply increase.
- Food prices would increase, leading to famine in other countries and hunger in our own.
- Social welfare programs would have to be scaled back.
- Federal and state governments would not be able to service their debts.
- Workers would have to work longer hours to maintain their current standard of living.
In other words, as soon as economic growth stops, economic decline starts.
But what causes the immediate decline? In a word: babies. As the population increases, more resources are needed to feed, clothe, and shelter all of the new people that are being created. To understand why this is happens, let’s consider a scaled-down economic model.
Imagine a village that has 100 people living in a state of economic equilibrium, that is, their economy is neither growing nor shrinking. Everyone has just enough food, clothing, shelter, and other amenities to take care of themselves—no more and no less than enough for subsistence living. Now let’s imagine that a “baby boom” occurs, and 20 new children are added to the village. What happens to the standard of living for the villagers? Assuming that they redistribute their resources equitably, everyone (including the new children) will only have 83% of the resources they need to survive. Over time, they will begin to starve or die of malnutrition.
We can see this occurring today in countries with low economic growth. As the population increases, there are not enough resources for everyone to rise above the poverty level.
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Similarly, in the U.S. we need to create around 400,000 new jobs every month just to keep up with the babies that are growing up and entering the labor market. If the economy does not grow, there will be no jobs for them. In the short term redistribution of resources (e.g., unemployment compensation, welfare) will prevent the unemployed from going hungry. But without long-term growth a countries wealth becomes depleted, causing instability and social breakdown.
However, if the new workers do find jobs and are engaging in productive labor, the economy will automatically grow as these laborers buy goods and services. Economic growth is, after all, a natural byproduct of productivity.
So, why do some people oppose economic growth? There are three likely reasons:
1. They don’t really understand what economic growth means; they assume opposing economic growth is the same as opposing “materialism.”
2. They believe economic growth harms the environment (e.g., contributes to global warming).
3. They want to limit population growth.
Reasons #2 and #3 often go together. There are a broad variety of neo-Malthusians, ranging from the “slow growth” advocates who would be happy with a return to a Medieval-era economy to the radical anti-human environmentalists who believe the planet would be better off without the species homo sapiens.
One trait they all share in common, though, is the idea that the number of babies born into the world should be radically curtailed. Telling people to stop breeding isn’t particularly effective, but fortunately for their purposes the same outcome can be achieved by limiting economic growth. Make the world miserable and poor enough and people will make the rational choice to limit the number of children they bring into the world.
Needless to say, this anti-natalist, nature-repristination philosophy is antithetical to Christianity. The very first commandment that God gave mankind was to, “Be fruitful and multiply and fill the earth and subdue it and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.” By simply fulfilling that command we trigger the factors that lead to economic growth—increased population, increased productivity, and accumulation of capital resources.
Economic growth is therefore not, as McCarraher claims, the “beatific vision of the capitalist moral imagination.” It’s neither a goal that should be pursued for its own sake nor a means to achieve a materialist paradise. Economic growth is not the chief end of man, but merely the blessing that results from fulfilling God’s cultural mandate.
Reprinted with permission from the Acton Institute.
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